How the CPO Can Influence the CIO – a Tale of Two CXOs

If you’ve seen the Gene Wilder film, Willy Wonka and the Chocolate Factory, and the part where the children get their first glimpse of the chocolate room – a beautiful meadow made entirely out of sweeties – you will have an idea of what it was like waiting outside the Imperial Room at the lustrous Westin hotel, Paris, for Coupa Inspire’s evening drinks reception a few weeks back. Two grand, ornate doors were opened inwards in synchrony by two equally grandly attired footmen, to reveal a splendour of glittering chandeliers, giant glass vases dripping with tropical flowers, tall platters with all kinds and colours of finger food, and a string quarter set against the backdrop of the stunning Versailles-esque ballroom.

None of that has anything to do with procurement, other than giving you a taste of the event if you couldn’t make it, and that being the room in which we met Kendra Von Esh, Executive Strategic Adviser with Coupa. She works with CIOs and industry Boards to inspire dialogue and change strategies with internal and external IT communities. Kendra heralds from a CIO background with Veolia, where she was heavily involved in a large Coupa implementation, so she has first-hand experience of both the CPO side and CIO or IT Director side of such transactions. And she had some very interesting thoughts on how the CPO can influence the CIO in any organisation.

We’ve seen many cases where Procurement and Finance run into opposition from senior IT bodies during a major systems implementation project. That might be for many reasons, including concerns over compatibility, integration issues, budget, security or just plain ‘protecting their turf’ – it is IT’s job, not Procurement’s. So with experience from both sides of the fence, we asked Kendra how a CPO might get the CIO on board, and here’s what she told us:

Early involvement: “We are seeing increasing evidence, with the rise of SaaS especially, that the CIO is being bypassed and that software vendors are going straight to the business. This is why the CIO may not feel particularly positive towards the project and may become rather more defensive because they were not engaged in the early stages to partner with the CPO. The key is to get the CIO’s involvement early on so they feel a sense of ownership in the selection of the technology, how it will integrate with the existing application portfolio and with the overall IT strategy. The CIO is smart enough to know what the business needs in terms of functionality and vision and can help the CPO get through the technology confusion to find a solution that will make both departments successful now and in the future.

The earlier the CPO engages with the CIO or CFO (or better yet, at the same time) the better the chance for the duo or trio to join forces to present to executive leadership. It is never smart to leave the CIO until the end. That’s crucial.”

Strong business case: “The CIO and CPO sometimes have similar issues with ROI or the savings they bring to the organisation. Let’s be honest, I am sure every CIO has been asked the question – ‘what did we actually get out of the XYZ project’ and I am sure some CPOs have been challenged as to whether they really did save what they are reporting. The CIO and CPO can join forces to partner with the SaaS vendor who can help them both develop a business case using their data and develop a complete TCO for implementation and ongoing support costs.  Then they just need to engage their CFO to get buy-in and surely the time to value will prioritise the procurement initiative to the top of the list. What CEO wouldn’t support a four to six month project with measurable results that the entire organisation and suppliers will truly like to use?”

Target the right concerns: “The Harvey Nash/KPMG CIO Survey 2015, reveals that there are a number of top concerns for the CIO, including digital disruption. CIOs are adopting greater IT responsibility for digital, and 56 percent of them will be focusing on building a digital infrastructure to allow greater innovation and agility. There is now a real proposition for a new role: the Chief Digital Officer (17 percent of organisations now have one, up from 7 percent last year). So remember, the CIO isn’t heavily involved in managing people any more, it’s more about data management, data security, data analytics, vendor management, change management, process efficiency and especially agility. So talk to me about how your proposition will help in those areas.”

Speak my language: “Unfortunately, my most important customer wasn’t the CPO. CIOs have problems everywhere, so the trick for them is to focus on the most value in the shortest amount of time. Let’s face it, CIOs need wins! So, if Procurement can also demonstrate time to value, process efficiency, business agility and on budget -- and the impact on my IT organisation is very small and the shift to a predictable spend subscription model (SaaS) where the risk is not mine -- those are the proof points we are looking for.

IT is always being asked to do more with less – so if you want to get them on board, talk to them about what’s important to help with that: viability, time to value, speed, the cloud, lower TCO, timely innovation. They are the ones who have to make it work, it just happens to be a Procurement product that delivers, so make sure you speak their language and educate them on how this makes their lives easier so they can focus on other initiatives.”

Value over revenue: “When you are talking about cloud spend management, you are expanding the value of your ERP system, not replacing it or upgrading it. None of those disruptive activities apply. The value is extended to IT, so that resource can be reallocated elsewhere, creating more value. Savings are reinvested into areas that will generate more profitability. That’s a key message for CIOs – helping them to justify savings -- not how much you saved on laptops last year, but applying metrics to how much value you created. ‘Spending Forward’ or ‘Self Funding’ projects is how I like to refer to it.

But what is value? For me, it’s quantifiable business impact. At executive level, this can drive more transparency and that is what will lead to a stronger CIO-CPO relationship. Put value on the table, break down barriers and take away the veils. At the end of the day, Procurement’s job is to help people make the right decisions. And to do that they need to communicate the right information: for the CEO, every sentence has to matter.”

Thanks to Kendra Von Esh for that useful advice – and here is one final thought from her that will resonate with many of us who have been through major systems projects.

“Engage IT early. Keep pushing -- it will take time for your message to get through, but it will happen!”

 

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